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How to Use Blockchain Effectively in Auditing and Assurance Services

  • Ipek TurkerEmail author
  • Ali Altug Bicer
Chapter
Part of the Contributions to Management Science book series (MANAGEMENT SC.)

Abstract

The last decade has been quite innovative and revolutionary for both digital tools and financial reporting. Until now, auditing and assurance services have dealt with sorting mountains of data. With firms upgrading their business methods and internal control systems through the use of information technologies, it has become mandatory for those same information technologies to be used in auditing and assurance services. Accordingly, the quality of auditing has increased, taking out what used to be a drudgery for auditors. However, at the same time new areas of auditing and assurance services have opened up.

There has been speculation about whether the accounting information system will replace what accountants do, that is, whether blockchain systems will replace auditors. It is undeniable that when used in the audit process, blockchain systems increase the quality of the audit without increasing the time spent on the audited data. In some articles blockchain is referred to as one open, unmodifiable ledger. When auditing financial reports based on this ledger, auditors are able to increase the number of samples they use, even up to including the entire data set without increasing their work-load or the time necessary to audit the integrity of the data. However, this introduces new technological and business risks that the auditor will need to assess.

International Auditing Standards have not yet been revised in terms of how and when to use blockchain ecosystems and the risks that they create for external and fraud audits. This chapter will explain how and when to use blockchain technologies and identify the potential new risks that await the auditor. Since no definitive rules and regulations have yet been made, this study is based on the opinions of several professional bodies that are currently tackling bitcoin and other sub-tools that blockchain ecosystems are offering.

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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Faculty of Political Science, Department of Business AdministrationIstanbul UniversityFatihTurkey
  2. 2.Faculty of Business Administration, Department of Accounting and AuditingIstanbul Commerce UniversityBeyogluTurkey

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